Metro Performance Glass Annual Shareholders’ Meeting 26 th July 2019 Strictly confidential and not for public release
Introduction to Metroglass Highbrook Strictly confidential and not for public release 1
Meeting agenda 1. Chairman’s address 2. Chief Executive Officer’s address 3. General business and shareholder questions 4. Ordinary business and resolutions 5. Voting 6. Refreshments Strictly confidential and not for public release 2
Board of Directors Peter Griffiths Russell Chenu Angela Bull Independent, non‐executive Chair Independent, non‐executive Director Independent, non‐executive Director Member of Audit and Risk Committee Member of Audit and Risk Committee Chair of People and Culture Committee Appointed: September 2016 Appointed: July 2014 Appointed: May 2017 Rhys Jones Gordon Buswell Willem (Bill) Roest Independent, non‐executive Director Independent, non‐executive Director Independent, non‐executive Director Member of People and Culture Committee Member of People and Culture Committee Chair of Audit and Risk Committee Appointed: April 2018 Appointed: October 2015 Appointed: July 2014 Strictly confidential and not for public release 3
Chairman’s Address Strictly confidential and not for public release
Key messages Steady progress in New Zealand Recovery plans on track in Australia Debt reduction a key focus near term Dynamic competitive landscape Strictly confidential and not for public release 5
Deliver market leading customer service Our goals Develop our organizational capabilities Uphold our scale strength through product & channel leadership Leverage that scale to deliver solutions efficiently Strictly confidential and not for public release 6
Governance Key activities during FY19 • Completed recruitment of new Group CEO who joined in November 2018 • Formal board review with external consultant • Highly engaged board, conducting 15 board meetings, 7 audit and risk committee meetings, 6 people and culture committee meetings Current focus • Continued evolution of group strategy and monitoring execution • Progressing a number of important sustainability initiatives Strictly confidential and not for public release 7
Chief Executive Officer’s Address Strictly confidential and not for public release
Summary of the FY19 year • EBIT in line with March guidance, stronger debt reduction • Improved financial results in New Zealand (80% of group revenue) • Good progress made on people and customer focused initiatives in NZ, positioning the company well for increased competition • New Tasmanian plant achieved year one targets including reaching EBIT breakeven in Q4 • Strengthened balance sheet with reported net debt reduced by $11m Balanced by • Disappointing Australian financial results, including impairment of Australian intangible assets. Remedial actions and clear milestones in place for performance improvement • Operational improvements began emerging in Victoria and New South Wales following business reset • Increased competition across our markets Strictly confidential and not for public release 9
Executing on Metroglass’ strategic objectives Deliver market leading Develop our organisational Leverage our scale to deliver Uphold scale strength customer service capabilities solutions efficiently through product & channel leadership • Good insights from • Employee engagement • NZ commercial glazing • Right sized Canterbury customer surveys initiatives deployed revenue +9% business • Sustained • NZ workforce stabilised • New Tasmania plant • Positive trials of improved improvements in NZ opened and achieved finished good delivery • Continue to embed quality customer service year 1 targets system management culture • AGG operational • Launched Australian • Variable operational • Reinvigorated performance metrics below‐target LowE double glazing performance in AGG management program range Strictly confidential and not for public release 10
30% 9% Of Highbrook employees (for Reduction in voluntary example) involved in self‐led continuous improvement staff turnover vs FY18 projects Award winner: Designing with Glass – Commercial Farmers Corner Restroom Pavilion, Metro Performance Glass Apprentices enrolled 27 50 March July 2019 2019 30+ Staff engagement WGANZ – Most Promising Apprentice – Award winner: Designing with Glass – Commercial under $100K workshops run across the Glass and Glazing The Craft Embassy, Metro Performance Glass group in FY19 Strictly confidential and not for public release 11
Recent customer engagement Customer contacts: 328 Response rate: 74% 7.3/10 1 Customer contacts: 145 Response rate: 74% 8.0/10 1 Survey question: “On a scale of 1 to 10, how likely are you to recommend Metroglass to a friend or colleague?” Strictly confidential and not for public release 12
New Zealand market activity and operational performance NZ residential consents (by number) 1 Metroglass NZ product quality: % external reworks +10% +2.2% 4.0% 34,516 • Residential dwelling 31,392 30,626 consents for 12 months to 31 March 19 rose +10% 3.0% • 25,988 North Island +13% 21,716 23,018 2.0% • South Island +2% Canterbury 0% 1.0% 8,910 8,374 8,528 FY17 FY18 FY19 0.0% Q1‐FY19 Q2‐FY19 Q3‐FY19 Q4‐FY19 Q1‐FY20 South Island North Island Metroglass NZ delivery performance: DIFOT and late tail 3 NZ non‐residential consents (by value $bn) 2 Avg. residential lead time: 3 ‐ 4 days +8.0% • The value of +2.1% 7.1 100.0% non‐residential dwelling 6.6 6.5 consents for the 12 months 90.0% to 31 March 19 rose +8% 80.0% 5.2 4.1 4.6 • North Island +13% 70.0% • South Island ‐3% 60.0% 2.4 2.0 2.0 50.0% FY17 FY18 FY19 Q1‐FY19 Q2‐FY19 Q3‐FY19 Q4‐FY19 Q1‐FY20 South Island North Island DIFOT LateTail 1. Source: Statistics NZ, number of residential dwelling consents (12 months to 31 March 2019). No lag has been applied. 2. Source: Statistics NZ, value of non‐residential consents (new plus altered; 12 months to 31 March 2019). 3. NZ delivery‐in‐full‐on‐time (DIFOT) is based on deliveries within a fixed lead time (48‐72 hours). Late tail is delivery within DIFOT + 48 hours. Strictly confidential and not for public release 13
Australian market activity and AGG operational performance South East Australia detached dwelling approvals (by number) 3 AGG product quality: % external reworks 71,333 71,405 68,847 • Double glazing penetration is 4.0% increasing • Detached dwelling (house) 3.0% 29,565 28,868 29,670 approvals for the 12 months to 31 March 19 rose 0.1% 2.0% • Victoria ‐0.4%, NSW ‐2.4% 38,423 38,275 36,179 1.0% 0.0% FY17 FY18 FY19 Q1‐19 Q2‐19 Q3‐19 Q4‐19 Q1‐20 Victoria NSW ACT TAS South East Australia alterations & additions (by value A$bn) 3 AGG delivery performance: DIFOT Avg. lead time: Avg. lead time: 5.7 5.7 5.6 • The value of alterations and 4 ‐ 5 days 100.0% 8 ‐ 9 days additions for the 12 months to 31 March 19 rose +0.1% 90.0% 2.7 2.7 2.6 • Victoria +0.9%, NSW –3.1% 80.0% 70.0% 2.7 2.8 2.7 60.0% FY17 FY18 FY19 50.0% VIC NSW ACT TAS Q1‐19 Q2‐19 Q3‐19 Q4‐19 Q1‐20 1. Source: Statistics NZ, number of residential dwelling consents (12 months to 31 March 2019). No lag has been applied. 2. Source: Statistics NZ, value of non‐residential consents (new plus altered; 12 months to 31 March 2019). 3. Australian Glass Group delivery‐in‐full‐on‐time (DIFOT) is based on meeting lead times negotiated with customers at time of order acceptance. Strictly confidential and not for public release 14
The use of double glazing in new residential buildings in Australia remains low, but increasing and provides a significant opportunity Management estimates of double glazing Hot Climate penetration in new residential construction 95% 70% ‐ 75% 65% ‐ 70% Mixed Climate 10% ‐ 15% Cool Climate Victoria New South Wales Tasmania New Zealand Strictly confidential and not for public release 15
Australia has a clear building code pathway in place that will provide strong impetus to the increasing use of double glazing Roadmap of planned changes to Australia’s National Construction Code (NCC) 2018 2019 2022 2025 2028 Initial trajectory set and changes Increased energy to the NCC 2022 efficiency agreed requirements: Commercial Increased energy efficiency buildings requirements: Residential buildings Requires double Continued progression glazing solutions Requires double glazing in Further minimum Continued progression cooler zones performance standards increases expected for Further minimum both Commercial and performance standards Residential construction increases expected for both Commercial and Residential construction Source: Council of Australian Governments Energy Council: http://coagenergycouncil.gov.au/publications/trajectory‐low‐energy‐buildings. Strictly confidential and not for public release 16
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